Canfor Corporation

Okay. Thank you, Operator, and good morning, everyone.

And for joining the Canfor and Canfor Pulp Q4 2021 results conference call. I will make a few comments before I turn things over to Pat Elliott, our Chief Financial Officer of Canfor Corporation and Canfor Pulp and our Senior Vice President of Sustainability.

Pat will provide a more detailed overview of our performance in Q4. In addition to Pat, we are joined by Kevin Pankratz, Senior Vice President of Sales.

I want to start by recognizing all of our employees across the organization, who in the face of many challenges, including the pandemic and significant supply chain challenges, our employees demonstrated exceptional resilience and dedication and they were key to our success in 2021. We continue to deliver on our strategy during the year and I would like to highlight just a few key areas.

In October, we announced our bold ambition to become a global leader in sustainability. I’d like to thank everyone across the organization who was contributing to setting and achieving our sustainability goals.

This is a team effort and it’s great to see the support it’s receiving from our employees. One area of focus over the last few months has been working to develop our carbon target, which we expect to announce in Q2.

We are pleased that forest products are increasingly being recognized for how they help mitigate climate change as the world moves away from fossil fuel-based products. In October, we announced our planned investment in a new biofuel plant in Prince George through our Arbios joint venture and progress continues to be made towards construction of the facility.

In 2021, we continued our focus on global diversification and successfully executed on several strategic initiatives announcing plans to construct the state-of-the-art greenfield sawmill in Louisiana, completing a number of organic capital investments, purchased an additional operation in Sweden and concluded an agreement for the purchase of Millar Western solid wood assets. Since 2018 and including Miller Western, Canfor has added 2.2 billion board feet in annual production capacity through our $1.2 billion of investments in acquisitions, which have been focused mostly in the U.S.

South, Europe and in Alberta. A much more globally diversified operating footprint is ensuring that we are able to provide exceptional service to our global customers, as we navigate the many challenges throughout the supply chain and this was evident in Q4.

We are continuing to assess additional organic and value-added external growth opportunities as we look to grow our lumber business globally. In terms of our results, our lumber business benefited from record high pricing and strong operational performance during 2021, with operating income of $2.2 billion before adjusting items.

In the fourth quarter, our lumber business operating income before adjusted items was $273 million supported by continued strong results in Europe. Despite extreme volatility experienced during the year, lumber demand far exceeded available supply, resulting in unprecedented price increases and record high earnings for our lumber operations.

While our operations benefited from favorable market conditions, we faced a number of significant challenges during the year, including extreme wildfires, historic flooding, the impact of COVID-19, along with the many supply chain issues. As a result of these challenges, as well as ongoing uncertainty associated with fiber supply in British Columbia, many of our sawmills were on reduced operating schedules during the third quarter and fourth quarter.

BC continues to be a challenging jurisdiction to operate in due to a smaller fiber basket as we enter the post-mountain pine beetle era, in addition to significant uncertainty brought on by several new and proposed policy changes, land use decisions and legal decisions. A few weeks ago, we announced the difficult decision to permanently reduce the production capacity at our Plateau facility to align production capacity with the sustainable fiber supply in the region.

We regret the impact this decision will have on our employees and we are committed to supporting those impacted through the transition, including providing jobs to those who would like to stay with Canfor. We also announced $14 million investment in Plateau to improve manufacturing flexibility and lumber recovery and better align the manufacturing capabilities of the Plateau operation with existing fiber supply.

While these closure decisions are difficult, we remain focused on enhancing value and maximizing returns from our fiber basket in British Columbia, ensuring the long-term success of our operations with a footprint that aligns with available economically viable fiber. We continue to work with government and our indigenous partners to ensure a sustainable, globally competitive forest sector in BC and are pleased to announce our intent to sell our Mackenzie tenure to the McLeod Lake Indian Band and Tsay Keh Dene Nation, which provides an opportunity to grow the nation’s leadership in the forest economy and stewardship opportunities within their traditional territories.

Turning to Canfor Pulp, 2021 was more challenging, particularly in the second half of the year due to significant transportation delays related to the extreme weather in British Columbia, COVID-19, production downtime and weakness in the global markets. Before taking account to an asset impairment charge that Pat will speak to, Canfor Pulp had operating income of $32 million in 2021, with an operating loss of $41 million in the fourth quarter as a result of significant downtime associated with supply chain constraints, as well as the ongoing repairs, the Northwood’s recovery boiler number one.

While pulp markets have improved significantly in early 2022, Canfor Pulp continues to be impacted by ongoing supply chain challenges. With our major maintenance on Northwood’s recovery boiler progressing as scheduled on time and on budget, we remain focused on improving operational reliability, closely managing cost and maximizing fiber utilization going forward.

Lastly, I would like to thank Alan Nicholl, who after 14 years with Canfor will be leaving the company this month. Alan will continue to serve as President and CEO of Arbios, and has taken on the role of Managing Director with Licella Holdings, our partner in the Arbios joint venture.

I will now turn it over to Pat to provide an overview of our financial results.

Thanks, Don, and good morning, everyone. The Canfor and Canfor Pulp quarterly results released yesterday afternoon and come together with an overview slide presentation in the Investor Relations section of the respective company’s website.

In my comments this morning, I will speak to quarterly and annual financial highlights, a summary of which is included in our overview slide presentation. As Don has already mentioned, 2021 was an exceptional year for Canfor.

In the face of significant weather and supply chain challenges, we saw the benefit of our diversification strategy with our global lumber platform generating unprecedented earnings during the year. We are pleased to have executed on a number of strategic initiatives during the year, supported by our strong balance sheet and record earnings.

Capital expenditures were approximately $430 million in 2021, which included $83 million for our greenfield sawmill, as well as various organic growth initiatives largely undertaken in the U.S. South and Europe.

Our greenfield mill is progressing well, but due to a challenging supply chain is slightly behind schedule and is anticipated to start up in early 2023. We repurchased approximately $20 million of shares during the year and repaid over $420 million of term debt, ending the year with net cash of $1.1 billion.

Looking ahead to 2022, we currently anticipate capital spending of approximately $430 million in the lumber segment and have just completed the Millar Western acquisition yesterday for $420 million, including target working capital of $56 million. For Canfor Pulp, we are forecasting $70 million in spending, including approximately $30 million towards ongoing repairs to Northwood’s recovery boiler number 1.

In addition to an expanded capital program in 2022, we continue to look at several organic and external growth opportunities and plan to restart our share buyback program and anticipate moderate opportunistic use during the year. Turning to our quarterly results, our lumber segment generated operating income of $273 million in the fourth quarter before adjusting for an asset impairment charge of approximately $200 million.

Results in the fourth quarter benefited from continued strong earnings in Europe, with our European operations contributing approximately 50% of our lumber segment earnings for the second consecutive quarter. In 2021, EBITDA from our European operations was approximately $630 million.

In North America, our results reflected the impact of reduced operating rates, with production and shipment volumes well below the previous quarter due to significant supply chain challenges, severe flooding in British Columbia and reduced trucking availability in the U.S. South.

Log costs in Western Canada also reflected moderately higher market based stoppage. While pricing in North America increased significantly as the quarter progressed, offshore sales realizations declined following the record high prices experienced in Q3.

Due to timing of shipments versus orders, the surge in lumber prices towards the end of the fourth quarter will largely be realized in early 2022. As noted, we reduced the net book value of both our lumber and pulp assets in British Columbia following an impairment test completed in accordance with IFRS.

This nearly $300 million charge reflects the rightsizing of our balance sheet to reflect the reduced availability of fiber supply in certain regions of British Columbia. Our pulp mill -- our pulp business, excuse me, had an operating loss of $41 million in the fourth quarter before adjusting for the asset impairment charge of $95 million.

Results in our pulp business reflected weaker global pulp market conditions, as well as the impact of severe flooding in British Columbia, which crippled transportation networks and resulted in significant operational downtime during the quarter. In addition, Canfor Pulp announced extended capital rate related downtime at Northwood.

The rebuild of the lower portion of the recovery boiler number 1 is going well and mill is expected to return to full production at the end of Q1. While global pulp markets have improved significantly in early 2022, Canfor Pulp continues to be impacted by ongoing transportation challenges, with a significant lag in sales realizations anticipated in the first quarter.

As we rebuild of the RB1 approaches completion, Canfor Pulp is focused on improving operational reliability, improving fiber yield and reducing and stabilizing manufacturing costs. And with that, Don I will turn the call back over to you.

All right. Thanks, Pat.

So, Operator, we are now able to take questions from analysts.

Hi. Good morning.

Don, your outlook was pointing to some near-term pressure in R&R. I am just curious, what are you hearing from your home center customers about on maybe a full year basis in 2022?

How do they see volumes playing out this year versus last year?

Yeah. Thanks, Hamir.

And I will let Kevin talk about that, because we -- it’s actually looks well -- quite promising actually for 2022. So, well, Kevin, you go ahead and talk about it?

Sure. Sure.

Hamir, maybe just a bit of a background there. We actually ended Q4 with something like beyond seasonal norm takeaways at the -- in the R&R segment, which was really encouraging and we actually saw that continue and -- in the year-to-date so far.

So I would say, year-to-date, we are experiencing basically very similar numbers to last year and which is obviously encouraging and it’s maybe difficult to predict how it’s going to go for the balance of the year as prices trend up. But at current prices and the current indicators we are seeing today, we are seeing pretty good takeaway.

Okay.

And Kevin, can you give us a sense as to where inventories are in the channel?

I would say that, they are improving. We had obviously the real challenges early this year and struggling to keep up but we did.

And I think, the BC transportation challenges are well documented, but I think, well, we are very fortunate that with our Urbana Swedish footprint, we were able to offset some of that pressure by increasing shipments from there into the eastern seaboard.

Great. Thanks, Kevin.

And Don, I wanted to ask, in Europe with the war in Ukraine and sanctions against Russia. Do you see that effectively pushing Canadian producers out of China as trade flows readjust and are you seeing any upward movement in product pricing yet in Europe?

Yeah. For sure and it’s good question I think.

And I think, first of all, in China as it used to be a significant part of our business and while still it’s down significantly from where it was at the peak, right? So, but if you just talk about the U.K.

-- Ukraine situation real quickly, our view right now is, first of all, Russia is about 12% of the global softwood production, first of all, to start with. And of course, the most of that production or a good part of its heavy to Western Russia and Siberia will ships into China and that will no doubt increase we think, for sure.

But that okay. What we are more thinking about the impacts in a positive way will be around the log supply to the Baltics, which is a major region, as well as the Middle East, North Africa and South Korea.

All of those regions rely on Russia for a lot of logs and that’s going up probably dry up to some degree, which creates an opportunity here in Europe for us from a pricing point of view. I mean, we think that our European business there is going to be able to pick up a lot of that lack of Russia supply into Europe, so we are looking -- we think that will be beneficial.

We haven’t really seen any price increases to speak of yet. It’s been more just maintaining where we are at.

But I mean, the real question is going to be down the road here, what kind of impact here over the next two months, three months, four months. But we do believe at least short-term that it will be beneficial to some degree, potentially from a price point of view, just because of the lack of product coming in from Russia into main -- into Central Europe, right?

But that’s kind of how we are seeing it. Now I guess the other thing we might see, Kevin, would be, too, is that, the European producers that were shipping into North America in a big way will probably revert back and try to fill that demand with Russia exiting Europe to some degree and that should help actually stabilize prices even better here in North America.

Okay. Great.

Thanks. That’s all I had.

I will get back in the queue.

Yeah. Thanks.

Thanks. Good morning, everyone.

Pat, I will start with you, can you give us context on specific assets that were written down in the provisions in lumber and pulp with those write-downs this quarter?

Sean, it’s more of a general provision across the BC assets, we don’t specify by mill site, so it’s across the fleet. And we basically look at the discounted cash flow over a number of years across that whole fleet and then we compare that back against the book value and that’s the adjustment.

It’s not a specific asset, no level adjustment.

Okay. All right.

Thanks for that. U.S.

South platform, you guys referenced some timber cost inflation. The competitors did as well.

Can you help us understand how much of this do you think is temporary related to weather or transportation disruptions? How much might be structural?

What are you thinking going forward for that cost line item?

Yeah. Well, I think, it’s in the neighborhood of probably 5% is what we sort of got it before roughly what we see overall for this year.

But largely those issues that we have as we have outlined are weather wise, trucking, the availability of trucking is a big one, which is really labor, I guess, overall. So, all of those things have contributed to some of the some of that inflation that we are seeing here.

And but really it’s -- it varies a lot depending on the regions as well across the U.S. South.

So, overall, maybe a little bit of it is structural, but there’s a lot of it just strictly costs by some of those unusual events.

Okay. Thanks, Don.

Last question for now. I know there’s a lot of moving pieces, but if you normalize for the Millar Western acquisition, just try to gauge in Q1 how your Western Canadian lumber production is trending versus what we would have seen in Q4.

It sounds like there’s still a lot of challenges getting wood into the mills, getting product to market. Can you give any sense of how that’s trended versus what we just saw for the fourth quarter for you guys?

Go ahead, Kevin.

Yeah. Sean, I can take that.

I mean, clearly, in BC in Q4, we had -- we are running our business at 80% in British Columbia for the most part and we took some Christmas downtime as well. So right there, you are going to have a big lift.

And then, obviously, we are going to add the Alberta assets $630 million feet on an annualized basis. We are having some shipping challenges out of BC.

I think we are going to build some inventory in the first quarter. Hard to quantify that, but I would say, we would be up substantially quarter-over-quarter.

Okay. All right.

That’s encouraging. That’s all I have for now.

Thanks, guys.

All right. Thanks, Sean.

Good morning, Don, Kevin, Pat.

Good morning, Mark.

Good morning, Mark.

To start off, either Don or Kevin, can you give us some sense of what the inventory looks like at your sawmills in Western Canada right now, just given these transportation issues?

Yeah. For sure.

So maybe I will just do it by region there a bit there, Mark. So I think in Europe, it’s actually -- they were all in balance normal inventory levels and transportation today has been quite fluid.

I would say the similar situation for the U.S. South.

We are right in line. We haven’t had the same challenges.

But in Western Canada, we are up, for sure, just really struggling with railcar supply is the biggest challenge, trying to help offset that a little bit with trucks, and of course, the backup on the marine with containers. So we are up -- we are definitely up above where we expect and it probably is going to take us by the end of Q2 to get it back down to normalized levels.

Any way to quantify kind of what that increase might look like, Kevin?

It’s kind of fluid, so all I know is it’s going to be up there, Mark. I can’t really give a specific number.

Okay. All right.

Next question, just it seems like when I read through the MD&A, there was more in there on the longer term challenges of fiber supply, including for the pulp mills. So I wondered if you could just shed some more general light on your thinking around the for existing pulp mills.

For sure, and I think, Mark, and we talked about this a little bit just in the context of BC fiber supply period, not really singling out necessarily pulp mill particularly. But just looking at overall fiber supply in British Columbia, we do believe there’s going to continue to be pressure there on a downwards direction here in terms of overall fiber supply, and as a result of that, probably another couple of billion board feet of lumber that is going to need to be reduced here in British Columbia, just face the fact, so that’s due to beetle, it’s due to forest fires, it’s due to policy just a bunch of different things and we have -- I think we have mentioned that before.

But in addition to that and as a result of that, clearly, it’s going to be less residual fiber as well. So there’s going to be an impact here in BC over the next several years and it could be one year, two years, three years, but over that timeframe, we are going to see some challenges on some of the secondary manufacturing facilities, I am sure.

In addition to that, the pulp mill or two, perhaps, probably, our view right now probably would be more like one depending on the size and that’s kind of how we see it, which probably no surprise, because that’s kind of been what we have been saying here for a while, right, so.

Yeah. And we have done without putting, like, trying to get too granular on this, but just, when we think about your own pulp footprint and the fact that you are putting a lot of capital into Northwood, I think, tells us that your view that mill as a long-term asset, is that fair?

Yeah. That is very fair.

And would it also be fair to say, Taylor when you used to report it separately, seemed like it was only kind of marginally profitable, taken downtime right there, right, at that mill right now. Is that probably the one that faces the greatest challenge in your view of your portfolio?

Yeah. I mean it’s a different type -- BCTMP is versus MBS Australia, clearly there were challenges there for sure from a fiber point of view, but also from a more importantly from a market point of view too.

And I think in both cases and so we -- but as it stands right now, the six weeks that we have announced is the temporary downtime is still in place and we haven’t made any further decisions over and above that going forward.

Yeah. Okay.

And then just turning this whole fiber supply issue on the lumber side, when you were -- you have been quite proactive here, you announced the Plateau move in the midst of really good lumber markets. Do you think the sort of additional 2 billion board feet you talked about.

Is that going to come easily or is that going to take a significant downturn in the market to drive that out of the market, just in your view?

I think, clearly, the downturn could -- if there was a serious downturn that would probably accelerate that in some areas, for sure. But I think, I mean, again, we just got to kind of face the facts as an industry, there’s going to be less fiber available going forward, which is going to be the bulk of the reason why, obviously, low prices might accelerate that, like, I said.

Okay. And then, if we look past kind of the Monday closing on Millar Western, you are still sitting on a lot of cash and it just looks like you are going to generate a lot of cash in the first half of the year.

Can you just give us some sense for the priorities for the cash, and then, within the M&A bucket of priorities, if you could just give us some sense of what you might be most interested in from both kind of a location and a market perspective?

Sure. Mark, I mean, as Pat mentioned, we are basically between the Millar Western and some of the capital that we have identified for this year, close to $900 million that we are spending just with those two areas alone.

Over and above that, certainly, we have got -- we got some projects this year from a sustaining capital point of view and it’s underway, as well as we have still got some ongoing organic capital projects that we have. Also, we will continue to be working on this year and going forward as well.

We have got the greenfield project, of course, going on at the Ritter. And as we look forward here, maybe could be some opportunity there for one or two or whatever more there, too.

Not only in the U.S. South, but could be in Europe as well.

In addition to that, just on opportunities, though, I think, we also have been pretty clear and we haven’t really changed other than maybe a bit more, well, the U.S. South for sure is a key area for us and it’s going to -- we still believe it’s a really, really solid area.

We like it down there as you know and we see opportunities there going forward. In Europe, same thing, I mean, Europe’s been really, really good.

Probably much better than we even expected and we always thought it was going to be good. And then, of course, Alberta, those latest deals, we really feel very fortunate we were able to get the Millar Western assets.

We like Alberta. We have always liked Alberta and that’s a new growth area for us as well.

We are pretty pleased with, so.

Okay. You have got a little position in engineered.

What I am just curious whether you are thinking about going beyond lumber and perhaps growing in the engineered wood area.

Yeah. For sure.

It’s something that we look at regularly. I know Kevin and his group, and Stephen and his group are looking at that on an ongoing basis.

We definitely like the position we have in glulam in the South with the two mills. We have a large market share, we have a fantastic product and we have had, frankly, had lots of interest there from other companies interested in them.

But we do believe it’s a core business for us for the future and it’s something that we can leverage and increase as we look forward.

Okay. Pretty good.

I will turn it over. Thanks, Don.

Great. No problem.

See you, Mark.

Yeah. Thanks.

Thanks, guys. Just a couple of questions, one on the CapEx budget of $500 million, just on the pulp and lumber side, if you could split that down between what is maintenance there and what is strategic or project work?

Sure. Well, maybe, Pat, do you want to?

Yeah. So you are asking for maintenance versus sort of strategic fall within the bucket thing?

Yeah.

Yeah. So the $430 million, I don’t know, we have the $200 million or probably the sustaining CapEx on the Lumber side.

And then on Pulp, it’s probably $30 million to $40 million. There’s a bigger number around RB1 this year, but its $30 million to $40 million, Paul, sort of sustaining CapEx.

Okay. So then if you got $200 million on sustaining on lumber, that extra $230 million that you are going to be spending.

What’s left on the derivatives? Is that about $80 million and what’s the balance -- where are you spending the balance?

Yeah. It’s about $100 million on derivatives, that’s like a little bit more than C$100 million that’s left and then just a number of sort of optimization projects throughout the fleet.

I mean, we are investing in both sides of the border actually right now and you mentioned Plateaus and investment. So there’s a series of sort of smaller investments there, Paul, that are both maintain and upgrade the assets, but there’s nothing as large as the greenfield in that mix.

Okay. And then congratulations on the potential sale in Mackenzie.

Have you got a fiber supply chip agreement with the potential new owners there?

No. Not at this point, we don’t, but certainly something that we would be -- we will be investigating as we look forward, though, but at this point we don’t.

Okay. And then Europe, you mentioned $630 million in EBITDA in 2021.

How do you see 2022 here? Is that going to be pretty similar year?

It’s shaping up to be pretty darn good year, for sure. So we will see how it plays out here going forward, there’s obviously a lot of geopolitical that we have talked about here earlier that may have some influence.

But for the most part, that business is solid. It’s very sound and the upside there, in our view, is definitely positive, for sure.

And so, but, obviously, it depends a bit on price and what prices do here, back half of the year more. We are not concerned at all about Q1 and Q2 there, because they basically locked their business, and as you know, quite a bit longer than they do in North America, right?

So it’s the back half of the year in every case, but we always creates a little more conservatism, for sure.

Great. We have a pretty good view on North American lumber prices.

Maybe you can help us out with what’s happening in Europe with a little bit more granularity, given there are muted outlook there.

Sure.

Okay. Kevin, why don’t you take that?

I get a stab here, Paul. So, I mean, it’s a lot of different markets that they serve there, right?

Like, I think Vida serves about 44 different countries. But the big one is obviously the U.K.

market and we did see softness in Q4 and early into Q1. But we are anticipating some modest increases in Q1.

But more material increases in Q2, because they basically didn’t really replenish a lot of inventories in that Q1 period. So could prices be in that 10% -- 10% plus this year, Paul, and also Central Europe for the same reason.

So that’s more of a Q2 guidance and then, like, Don said on the back half, it’s a lot of risk and uncertainty, from obviously with the Ukraine situation that could be short-term, potentially tighter supply would also have a corresponding inflationary pricing, but the longer term impact, whether it’s a supply chain, logistical challenges, all of that. It’s just a few unknowns, but maybe -- guide just maybe tempering and moderating in the back half.

Okay. Thanks for that.

And just last one on capital allocation, a lot of your peers have been buying back shares. You guys look particularly inexpensive and just wondering why you don’t see Canfor shares as a buy right now.

Pat’s going to buy a few. Go ahead.

Yeah. So, I did mention in my comments, Paul, we are going to restart buyback and we shut it off in the fall, because we were working on the Millar Western deal.

But, yeah, I mean, we will continue to have, I think, a small program and we acknowledge the value that sits in our shares right now and we will continue to selectively acquire some of those and we will start that again here before too long.

All right. That’s all I have.

Thanks, guys.

Okay.

Thanks, Paul.

Yeah. Just a couple of follow-ons.

I wonder, Pat, if you could help us at all with just sort of the Q1 flow-through from both lumber prices and pulp prices. I think when you talk about pulp, you suggested that there were going to be some delays in these higher pulp prices rolling through, I assume, because of kind of transportation delays?

Yeah. On the pulp side, I mean, I think, we see more than a 45-day lag in the prices.

Depending on the markets, it could be almost double that, I think. And on the lumber, I think, we mentioned in our comments, we really did not realize any of the upswing in the price in the fourth quarter.

The bulk of that’s going to be in Q1 a lot of, particularly north in Canada. Our offshore markets actually trended down after having record high board price in Q3.

So we will see all those prices move up relatively into January. We will be realizing those on lumber.

It will take February, March before we realize them on -- realize those in pulp.

Okay. And then, Don, one other question, I am just curious, given your non-integrated experience now, which is growing in the Southern U.S.

and Sweden, has this prompted any rethink on sort of the need for vertical integration in Western Canada?

Well, yeah, maybe to get the last part of that, I didn’t really catch that, if the vertical integration in Western Canada versus the South?

Yeah. I mean, basically you operate on a non-integrated basis between kind of lumber and the chip, where the chips go in both the South and in Sweden.

In Western Canada, you are kind of -- you are integrated and that you are supplying your residual chips to your pulp mill. So I just -- I wonder, given the experience in the South, given the experience in Sweden, does that make you rethink the strategy in Western Canada at all?

Yeah. I don’t think so.

I mean, not at this stage, I mean, I don’t know, Pat, is there anything you want to add to that, like we…

Yeah. The procurement in BC is different, right, than in the South and Sweden.

I mean, the tenure management and I think even just the way it stands out here, mix stand, having that pulp and lumber business together has created significant fiber synergies over the years in Canada. I mean, in the U.S., it’s a different procurement strategy that we employ.

So, I mean, I think, we have always saw the benefit of the integrated business, and I mean, even if we weren’t, the owners of the pulp business, Mark, I think, we would have a strong fiber supply arrangement with the pulp business, because it’s symbiotic if you follow me. So I think we are always going to be tight.

Okay. And Pat, just to be clear, the Millar Western residuals, those will continue to flow to the Miller Western pulp mill, is that a safe assumption?

That’s correct. Yeah.

Okay. All right.

Good. I will turn it over.

Thanks, Paul.

All right. Thanks, Operator.

All right. Thanks, Operator.

And thanks everyone for joining the call and we look forward to talking at the end of Q1. Thanks again.